Money and Emotions: How feelings can shape our finances – Episode #573

Ninety-five percent of our decisions and behaviors are shaped unconsciously by our subconscious mind. Money is more than just numbers—it’s deeply intertwined with our emotions and the decisions we make. From the tulip buying craze in the 1600s, to the recent boom in crypto and NFTs, our emotions have always been a driving force in what we buy and why. In this episode, Matt, Jake, and Ryan dive into the why of making money decisions and how our emotions can impact choices without us even being aware.

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Podcast Transcript

Matt Mulcock: Hey, everybody, welcome back to another episode of the Dennis money show brought to you by dentist advisors. We have a great show for you today. We have Ryan, Jake and I in studio talking about emotions and investing. We talked about major market events that were impacted by emotions, really made worse by the emotions of market participants.

Uh, us as investors. And then we share insights from Jake’s article on this very topic and talk about ways that you can remove emotions from your money to sit money decisions and start making smarter investment choices and building better systems for building wealth. As always, hope you enjoy the show.

We are here in studio, feels good, we got the whole set up, shout out Chase. Hooking us up., we’re going to, uh, the, the video quality is going

Ryan Isaac: Yeah, just

Matt Mulcock: roof

Ryan Isaac: Yeah. Amped up. Amped up to 11.

Matt Mulcock: okay. Today we’re talking emotions and investing. We’re going to get like really super emosh,

stop. Okay. I want to give a shout out to our guy. We do this all the time. I don’t think he even listens to our show. I’m going to just text him and say, listen to these.

Ryan Isaac: I think anyone we shout out probably

Matt Mulcock: doesn’t, I know one guy.

Ryan Isaac: them, so there’s no way

Matt Mulcock: I know one guy. Shout out Mike Baird, every time, my guy. Christine Yuen, we love you. But this guy, I don’t think listens very often. He has listened, but I don’t think very often. Daniel Crosby.

Ryan Isaac: yeah. Crosby. I just hung out with him. He was just in my neck of the woods.

Matt Mulcock: I just want to give the, I just give him the origins of this episode because I was reading, uh, he came to our summit, to the Dennis money summit.

He did an incredible job

speaking at our summit. Uh, and he was promoting his new book that comes out in October called the soul of wealth. And he was so gracious and brought quite a few copies for everybody.

Ryan Isaac: Were you able to snag one for

Matt Mulcock: Yeah. So I, well, so, so here’s what happened. I snagged one. A couple of our team. Cause so, well, I felt really bad because everyone lined up that all the books there, he was signing them all.

We all waited, right? We told the team, wait, you can’t pull anything until we know all of our clients get them, all the dentists get them. So I waited for quite a while and there was probably like five or six left.

, I kind of looked around for a while and everyone had left. So I was like, okay, I’m going to snag one now. And I got it for a gift for my brother in And I’m not kidding you, he signed it, wrote a little note to him, I took it, and I went to like, walk away, and right then, client, and her husband walks up, and she’s like, oh, is there any left?

And there was like the last

And I’m

clutching the book, okay? But he’s already written a personal note to someone that’s not her, so I was like, I’m gonna, I could give this to you, but I feel awkward. So, long story short, we Ordered more and sent them out to people that didn’t get them. There’s only a couple. All

that to say soul of wealth coming out in October.

It’s amazing. Uh, we have, again, we’ve got early copies. So I was reading a chapter in there where he’s talking about this topic, emotions and investing.

And he mentions a study that I wanted to, to reference to kind of kick us off. But, but I guess before we do thoughts on emotions and investing, any initial thoughts you guys have.

Ryan Isaac: it’s all it is.

Jake Elm: Yeah, that was my, honestly, that was my same how do emotions impact investing or how do money? money is emotions, right? That’s just how it goes. Um,

so, yeah, I don’t think you can separate

Matt Mulcock: Um, and so yeah, I don’t think you can separate the two.

Ryan Isaac: like,

Matt Mulcock: Whatever it is. Um, so gonna talk about today, but okay. So in this book they talk about the study by Jennifer Lerner So you I know you love a good story about a

Ryan Isaac: The study

Just, uh, just give me all the stories

Matt Mulcock: Yeah, you even said you were gonna read through it and then you’re like, I’m gonna

Ryan Isaac: Yeah, I saw the outline and I was like, oh, I don’t know, I don’t remember this so I want to hear it

Matt Mulcock: Okay. So what she did her and her research partners they brought in a group of people and they broke him up into two groups They designated one group the sadness group and one group the no emotion group so they put a sticker on you You’re the sadness

Ryan Isaac: Oh, they just named

the groups that they weren’t actually like sad people.

Matt Mulcock: no, no,

Ryan Isaac: They’re like, who looks the most sad? you, okay.

Matt Mulcock: so they they brought him in and they they knew like the sadness group was gonna go do I’ll tell you here, like they, they categorized him in that group, not because they were initially sad and then the no emotion group. So what they did is the sadness group, they watched clips of the movie called the champ.

You’ve ever heard this? I’ve never heard of the

Ryan Isaac: know The Champ.

Matt Mulcock: Apparently there’s some sad parts in it. And specifically, there’s a part where a boy is dealing with the death of a mentor, and they watched these clips. Then they were asked in the sadness group, they were asked to write out.

Some thoughts about a similar event that happened to them and how it impacted their life. So making them sad, getting emotional, right? The no emotion group they brought in and they watched a brief video. I love this about fish. I don’t know why just about fish.

Ryan Isaac: in general, like swimming upstream, spawning.

Matt Mulcock: just fish.

Maybe just watching videos of a fish in like a tank. Uh, and then they were asked to just write out some thoughts about how their day was.

Ryan Isaac: Okay.

Matt Mulcock: This is the no emotion group. Yeah. Right. Sounds nice. Then, so they did all that. Then they told these people that they were going to do a second study, totally separate, all around highlighter pens and, setting prices for highlighter pens.

They told them they were separate, you know, these

Ryan Isaac: Yeah. like,

Matt Mulcock: cheeky. They’re, they’re, you know, they’re really connected. So what they did is they took, they kind of took people from both groups and spread them. so some from the sadness group, some from the no emotion group. Part of the group was, , selling a pen, selling the highlighter pen, setting a price to sell it.

And then the other group was setting, a price to what they would pay for the pen.

So what they found is that those in the sadness group who were then moved into the seller group. So, sorry to the, to the buyer group. So like, what, they would actually pay for the pen? They offered a price 30 percent higher than the No Emotion Group.

The group, from the Sadness group, who was set to sell the pen, or the marker, the highlighter, accepted a price 33 percent lower than the No Emotion group. Does that all make sense? Are you following?

Ryan Isaac: following?

Matt Mulcock: So the Emotional group, the Sadness group, was

Ryan Isaac: way

Matt Mulcock: way more money. then they were taking way less.

So

Ryan Isaac: So their perception of value was very skewed because

Matt Mulcock: based on their

Yes.

Jake Elm: wondering like why that is like, is it they’re feeling sad and so like the buyers are trying to give other people more money to feel empathetic with them or I don’t, I don’t know why, but that’s interesting.

It is, but the bottom line is it skewed their perception of kind of what prices should be or what value should

Matt Mulcock: Yes. Like very much. 30 percent is no joke. Like, I know they’re just little markers, but they found, so that was their determination was the impact of emotions on both buying and selling and how you would approach to that very thing. And then, , anyway, so I thought that was really interesting. So on the buyer thing, you’re, you’re willing to pay 30 percent more.

I thought of like people that do like, you know, the old retail therapy, it’s like, you’re sad. You’re trying to

Jake Elm: Oh yeah. Oh

Ryan Isaac: like you know, how much

Matt Mulcock: more money you’re going to go out and spend based on your emotions or being sad. Yeah. Yeah. I wonder if there’s something similar, if they did this same thing of like happiness,

Ryan Isaac: that.

Matt Mulcock: that

would impact that.

Jake Elm: Yeah, I have a lot of money conversations where people are bringing, whether it’s an investment or a purchase or something. And sometimes it’s the opposite of the sadness. It’s like, I just talked to the buddy and we had a 30 minute hype each other up about this thing session together. And I’m still like in that fit of emotion and I just want to go buy or do this thing.

Like I, it’s just right now, like I want to go do this. Usually if you wait a day or two, it fades off. But I see that a lot with just like, I talked to someone about this and we hyped each other up about it and it seemed like the best idea in the world. And that’s one of his impulse. Yeah. Like I just want to do it right now.

Ryan Isaac: Yeah, and then it

Matt Mulcock: So that’s, I think they, to that point, Jake, I think this study was highlighting specifically sadness obviously.

But I think the main takeaway and your story is perfectly like a perfect example of this is just emotions in general skew the way we approach our money,

Jake Elm: Yeah.

Ryan Isaac: Oh, yeah. Yeah. Well, like you were saying in the beginning, what’s the connection or the difference or how do they relate to each other?

They are, the emotions are money. Money is emotions. Everything we do. I mean, it is kind of funny. You hear this a lot in the investing world. Like I have an investing program that takes the emotion out of investing. Like I don’t care if you have the most boring You have one S and P fund and your whole investment plan for the rest of your life is just to own it and sit there.

You, you will have so many emotional ups and downs every single year of that journey in the most simplistic investment you can even imagine just because that’s what life does. And then you go take it out on your other parts of life, your money, your job, your income, your investing. Yeah, you can’t separate them.

They’re the same thing.

Matt Mulcock: I totally agree. I think part of it, It’s personality, right? Like,

Ryan Isaac: a huge factor. Or more interested

Matt Mulcock: It’s a huge

factor. just how we’re

Ryan Isaac: more concerned

Matt Mulcock: Or more interested in it or more concerned with it. Like I’ve been investing for a long time.

I’ve been in the industry for a long time. Are you at, we all have,

Ryan Isaac: I

Matt Mulcock: I don’t know how you guys feel, but I don’t think it’s even a result of my work. I think it’s my personality. I don’t care. Like, I don’t even look at my

Ryan Isaac: You don’t think that’s a result of your

Matt Mulcock: I mean, it’s probably

Jake Elm: Yeah, that’s what I was wondering. I was about to say that Matt is like, I actually feel like in my own experience, I haven’t been investing for decades on end, but it’s like, I feel pretty like, I’m

Ryan Isaac: Even

Jake Elm: even kill.

I don’t feel too emotional about it. Maybe those are the famous last words for

Matt Mulcock: Yeah.

Jake Elm: but it feels like, yeah, I wonder if it’s just temperament, personality,

Ryan Isaac: think it’s exposure to it though too. Like you just understand a bigger picture.

Jake Elm: which is what we hope to accomplish with this podcast, is to provide some education, some exposure

Ryan Isaac: You want to give that to clients too. We talked about this before when I, I’ve had, like I could care less if the market goes down 30 percent tomorrow in some giant crowd. I don’t care because unless the world ends, it’s going to come back up and then it’ll just keep growing from there. But when I had by a rental, By default, I didn’t choose to have it.

I just couldn’t sell it. It wasn’t worth enough to sell. And I had to have a rental. I was stressed like every month of that, but I had no exposure to real estate. That wasn’t in my family. I hadn’t, it wasn’t my career. I wasn’t, I didn’t spend time around. I just had to have this rental that I couldn’t sell yet.

And I was always stressed about every little thing freaked me out. Every email that I got from the manager. Yeah. Property manager. They did. I did nothing. And I had one tenant the whole time. And every time I’d

Matt Mulcock: they weren’t even a bad tenant, right?

Ryan Isaac: they were there the whole time and they paid on time the full amount the whole time. It stressed me out.

Every email I’d saw, I’d be like, Oh my gosh, what’s broken and be like 200 in the, in the sink. Cause the drain. And I would, why would I care? But it’s like, I had no exposure or experience to that. Probably temperament too. So I think that’s got to have a little

Matt Mulcock: Isn’t that funny though? Because there’s so many people listening right now who are You Who’ve experienced the exact opposite meaning they’re so terrified of a of their stock portfolio a market crash

But they’re sitting here being like you idiot like real estate.

It’s the best thing ever

Jake Elm: it is that, we get a lot of people like real estate, us as humans, we all love real estate because it is that tangible, I think, easy to understand.

Ryan Isaac: That’s what we

Jake Elm: And we feel like we have some control over it too. It’s like, I own this one building. I control the tenants. I control everything that happens.

Whereas my stock portfolio is some kind of amorphous, like, you know, an intangible type of thing. That’s not real. That’s like going up and down with the market. And so, yeah, I bet you people are listening to you say that Ryan and thinking, I think that about the stock market, like things seem to be going good in general, yet I’m scared or I’m nervous and I see this little up and I see this little down and I thought about it last Saturday when I was hanging out with my family, you know, I.

It’s just

Ryan Isaac: exposure. I think if I had five rentals and I had it for decades, or that was my family or my, my living, I, it just, it would feel normal.

It’s like if any of us right now started bleeding profusely out of one of our gums. We would all freak out in this room, but if a dentist would hear, they’re like people bleed out of their mouths like all

Matt Mulcock: who would pass out first? Yeah.

Ryan Isaac: percent. Yeah. I’d be gone in a heartbeat,

Matt Mulcock: Ryan just eyes in the back of his

Ryan Isaac: don’t even want to start telling my pass out

Jake Elm: Can I tell you one quick story with this? I went, so I actually have, I have a two year old boy. Um, we were walking, I have two two year old boys, but one of them I was walking with,

Matt Mulcock: got two for one.

Jake Elm: fell, he cracked his teeth on the cement. It was, it freaked me out. We went to the, to the dentist, and he was checking out his teeth and stuff.

And in that meeting I was like about to pass out. I was like going white and stuff.

Matt Mulcock: and stuff. I

Jake Elm: watching just, I don’t know why. I was just like, this is just creeping me out. I don’t

Ryan Isaac: The dentist is like chatting about a Netflix show with his assistant while

Jake Elm: Yes. And they’re doing this and the dentist is like, are you okay?

Do you need to sit down and I need to sit down and get a water Anyway, so this is that point like, yeah, I just, we don’t dunno about it.

And so

Ryan Isaac: get used to, which is why, as advisors, you really want if that’s their plan, if their plan is to grow and preserve their wealth slowly over time in the stock market, you just want them to stick around long enough to be a little numb to the movements of everything.

The scares that aren’t really scary and like, you know, the hype that’s not really hype. You just want people to get used to it so they can, their emotions can calm down and things feel a little bit more like, eh, whatever. It’s just another bloody tooth.

Matt Mulcock: Yeah. I think you guys are right. I think it’s, it’s the two, the, I think the two main factors here would be genetic, preset personality. Just how did you come, and then ‘ cause I, I, I’ll just using my own experience, I’ve never been a big, because

gambler, I’ve never been into day trading.

I know Jake, so, exactly.

Jake Elm: is crazy. You’re the opposite. I probably have the most boring, like, takes on investments of, like, philosophy. Like, I’m fine just letting you sit and ride, but I kind of, I do like the occasional, the Utah Jazz are going to win by X amount of points type of, you know,

Ryan Isaac: Yeah. You like to

Matt Mulcock: we know that’s, this year not, that’s actually the opposite. They’re going to lose by this amount of points.

Jake Elm: of points. We don’t

Matt Mulcock: yeah. But, but so I think, I think that’s it. I think genetic preset, your personality, just the way you came. And then to your, I think you guys are making the case very strongly. For also the exposure.

I think

Ryan Isaac: just get used

Matt Mulcock: it. Great example is the medical stuff. Like a dentist being exposed to bloody mouth would just be like,

Ryan Isaac: It’s just another

Jake Elm: and we’re looking at portfolios every day. And so we just

Matt Mulcock: And I just don’t

Ryan Isaac: You just see, yeah, I mean, we, we use these stats all the time, but. You know, in the last century, on average, the S and P is the benchmark for this, but markets go down on average, , 10 percent every 11 months for the, on, you know, on average for the last century, people don’t know that.

Matt Mulcock: As frequent as your birthday.

Ryan Isaac: And they’ll hear like, Oh, we’re in a correction territory. And they’ll act like it’s news and that we need to do something. It’s like, this literally happens on average, every 11 months. This is nothing. This is nothing at

Jake Elm: Do you want to know something?

Ryan Isaac: have to get used to

Jake Elm: Yeah. Surprising about 2024. I’m assuming this podcast is going to get released here in the next couple of

Ryan Isaac: Yeah, for

Jake Elm: Who knows what’s going to happen over the next couple of weeks. But in 2024, we have only had one single day where the market finished either up or down more than 2%.

So it’s actually been a pretty consistent

non volatile year. Interestingly enough. We’ll see what happens at the end of this year. There’s some things, I think there’s like an election or something coming up at the end Are we in an election

Matt Mulcock: year?

Jake Elm: maybe there might be some stuff, but

Ryan Isaac: know who the candidates are this year? I don’t

Matt Mulcock: This week,

Ryan Isaac: who

are the who knows next year? I don’t know. That’s kind of crazy. , but what’s so funny about that, we’ve talked about this a lot, even like on two cents and just in general, that you look at the data this year is a great example, but you would ask most people, like, does it feel like a good time to invest or be in the market?

Matt Mulcock: I think most people would say no,

Ryan Isaac: They would say that every year.

I swear to you they’ll say that every

Matt Mulcock: it’s because of what you guys are saying. It’s the emotions. It’s. They’re so scared, and I think it’s never been worse with the media. The media now, we live in a 24 7, 365 media cycle that they have to put out a product and they know

making you scared is going to make you click.

So that, I think that’s, but I’ve, we’ve said this. I don’t think I’ve ever seen more of a disjointment between the narrative and how good things actually are than right

Jake Elm: sense to me. I mean, it’s hard to be on social media every day and hear about all these bad things or these crazy things or these unprecedented times and be like, all of that’s happening, yet my portfolio is up double digits, that doesn’t quite, those things don’t correlate.

And so I think people just think if there’s all this bad stuff happening in the world. The stock market must

Ryan Isaac: bad. Must be must be bad too, but they’re not necessarily

They don’t yeah, I mean how many times have clients called and said I know my portfolio is down how much and you’re like You’re up double digits

like that’s a

Matt Mulcock: you’re up 20 something percent. They’re

Ryan Isaac: And they thought they were down going back to your study that you shared Matt.

What I think is interesting too is

Is such a lesson for all of us the people in this study didn’t know they were in the emotional group

Matt Mulcock: Yeah.

Ryan Isaac: not aware that their, their actions and

Matt Mulcock: That’s what they separated

Ryan Isaac: testing, they didn’t know they were being influenced by their emotions. And that is like, for me, that’s the takeaway here.

Not the emotions impact it. The takeaway is we have no idea and we think we’re rational people. We think we go around behaving rationally according to rules and logic, but like we don’t do that almost ever for me. I hear that. I’m just like, That’s the takeaway for me is we don’t know that we’re being affected by our emotions.

We have no idea. We think we’re being rational

Matt Mulcock: It’s such a good point, which is why so much of this and spoiler alert. That’s one of the takeaways from this. Oh, okay. No, Oh, okay. I didn’t read your outline cause I was

No, no, you’re hitting it. And it’s because like most of the time, one of the top takeaways of any of this stuff we talk about is how do I create more

awareness around how my fallibility as a human is impacting my

money, my decisions, like to your point, if you think you’re rational, you’re lying to yourself.

All of us are.

Ryan Isaac: Yeah.

Jake Elm: All of

It is

tough. Well, I love that you just said

Matt Mulcock: Well, it’s, I love that you just said that we’ve talked about this a lot too. This is why, what we do, like meaning our message, what we’re doing as advisors, our company, I tell people all the time. It’s really, really hard to quote unquote sell, because what we’re telling people is like, like, how do you tell someone like, Hey,

Ryan Isaac: what’s the pitch? Yeah.

Matt Mulcock: you’re the problem.

Like you’re actually the problem. And I’m

Ryan Isaac: fallible, emotional

Jake Elm: are going to lead to bad mistakes down the road and everyone’s like, no, it’s

Matt Mulcock: Yeah. What are you talking

Jake Elm: Yeah.

Matt Mulcock: Exactly. But it’s so hard. It’s so much easier to sell a strategy, a widget, a solution that’s going to fast track you to wealth and investments, whatever, exactly. It’s really hard to quote unquote sell. You know, let’s just focus on your behaviors and building some guardrails around yourself and sticking this for a long time and having an accountability partner.

Like, nobody wants to actually hear

Jake Elm: we behave rationally and we had, we were accountable to ourselves.

Yeah. It’s a great point.

Matt Mulcock: Yeah. And so I, I just, you, you sparked that, but so why, I guess why this matters, right? I think. And the impact emotions can have, we made a list and these are just some of the big ones over the last, I mean, we’re going back to a couple hundred years actually,

Ryan Isaac: but

Matt Mulcock: over the last few hundred years of like where emotions had like cataclysmic levels of impact on the market and wealth.

So just a couple of handful here. , we’re throwing back to, we just did a podcast about Dennis.

Ryan Isaac: Yeah. Dennis Dieter. Oh, you

guys

Matt Mulcock: in his

Ryan Isaac: Friend of the

Matt Mulcock: your friend of show, good old Dennis. so

Ryan Isaac: he

not the most popular kid in middle

Matt Mulcock: definitely not, not with that name, not with that name. , okay. But back in his day in the 17th century, there was a in fact, in 1637, the tulip craze, this is what I thought was so interesting with, during COVID and the craziness of crypto.

It was, it was literally the same thing. It was a repeat when people go Google, go Google, , tulip bubble of 16, the 1600s,

and you will read about it. And you’ll be like, it is the exact same

Ryan Isaac: like, all the NFTs.

Matt Mulcock: NFTs.

It was the NFTs of the day. It was just tulip bulbs and there was different brands and different colors and different people selling them.

Ryan Isaac: And a shortage, a scarcity.

Matt Mulcock: Well, yeah. And people started to literally trade these tulip bulbs and they ran up these prices by thousands and thousands. It I’m not kidding you. It was like the, the apes and like all the NFTs, it was

Jake Elm: Yeah, is that crazier or buying a digital picture of a rock crazier? Which, what, you know, what?

Matt Mulcock: they’re equally insane. I

Ryan Isaac: least the tulips alive,

Jake Elm: at least it’s a tangible

Ryan Isaac: put it in the

Matt Mulcock: you can plant and it

Ryan Isaac: put a little water on it. It has like, you know,

Matt Mulcock: Exactly. So

you

Ryan Isaac: it does photosynthesis. Think about that.

Jake Elm: gives us

oxygen. A

Ryan Isaac: does photosynthesis. What does a rock picture do?

Matt Mulcock: What have you ever done?

Jake Elm: What have you

Ryan Isaac: ever done?

Have you ever photosynthesize the sun? Never. Never. Have

you ever converted try it?

Matt Mulcock: No, I think actually we have.

I think our bodies do that a

Ryan Isaac: little

bit. Do we do that?

Either way? Do you

Matt Mulcock: Do you Photosynthesize. . Okay, so we’ve got the tulip bubble, right? We’ve got the roaring twenties. So we’ve got two sides of this, right? We’ve got the fear, we’ve got the greed. So you’ve got, the craze of the tulip bubble.

You’ve got the craze and greed that happened during the Roaring twenties that led to the Great Depression in 1929. you’ve got, and that lasted for, what, 10 years before they were recovered from that. You’ve got one that is not often spoken about, Japanese

Ryan Isaac: real

estate. I don’t think I know too much about this

Matt Mulcock: So the, this actually, this bubble was even probably one of the craziest.

Daniel Crosby talks about this in his book.

At one

point, the royal, there was like a royal, the royal palace, In Japan was apparently they, the price of it in Japan was more expensive than the entire state of California or something crazy like it was just

Ryan Isaac: just the property.

Matt Mulcock: the property, like just running price.

Ryan Isaac: Like, you could buy California and everything in it. Yeah. Okay,

Jake Elm: yeah.

It

Matt Mulcock: I mean, it was all

Ryan Isaac: and kick everyone out

except for like five friends.

Matt Mulcock: Yeah.

Ryan Isaac: We’d just surf all day.

Matt Mulcock: Just buy California.

Ryan Isaac: California.

kick everyone out, and like five people

Matt Mulcock: Yeah. So I didn’t know much about this either, the Japanese real estate, but it was crazy during the eighties and Japan is just now their market real estate and their stock market and their economy.

is actually just getting to a place where it’s recovering. They have been basically stagnant for 30, 40 years. Yeah. 50 years. Uh, because of that. Yep. You’ve got the. com bubble. Obviously we’ve got the great recession, 2008, 2009, and then the most recent being the crypto craze. So I just wanted to highlight those.

Daniel Cosby highlights in his book of just showing Number one, how unprecedented, or not, like how precedented this stuff is, it happens all the

Ryan Isaac: precedented.

Yeah. Yeah.

That’s the funny thing about unprecedented things is they’re, they’re pretty, it’s pretty precedented.

Matt Mulcock: happened, yeah, in the 17th

Jake Elm: It’s always the hard thing because it’s not that exact thing like the next crash will not be related to any of these

Ryan Isaac: It’s yeah. The nature of it is not, Predictable,

it happening. Yeah.

Matt Mulcock: The cause is always emotions,

Jake Elm: Yeah,

Ryan Isaac: And that it’s going to happen is totally

Matt Mulcock: It’s always fear or greed, greed is just fear of missing out.

It’s all fear. so then you wrote an article about this. Jake, you’ve written about this. There was an article you wrote. This is why I always love having Jake on. It’s because it’s so easy to be like, Jake, you wrote about this, because you’ve been writing for three, four

Jake Elm: Yeah. Yeah.

Ryan Isaac: do they find these really fast, by the way? Where do they find your

Jake Elm: Well you can find them on Dennis advisors. com if you

Matt Mulcock: We post them every week. And then you also have your own personal blog. They just get posted in both

Jake Elm: get posted in both

Ryan Isaac: Why didn’t you name your blog, Want to Make a Bet?

Jake Elm: Wanna Make

Ryan Isaac: Wouldn’t that have been such a good

Jake Elm: just like this.

Ryan Isaac: No, you don’t have to. It’s just like, that’s just niche Jake. You want

to make a

Matt Mulcock: Well, I think the Gen Z version of that would just be Bet.

Jake Elm: Right?

Ryan Isaac: Bet. Yeah, it would be.

Matt Mulcock: feel like it.

Jake Elm: No, I did.

Matt Mulcock: so cool that I just knew that. I know a lot about Gen Z. I feel

like I’m

Ryan Isaac: That was cringe. Okay.

Jake Elm: Sure,

this

may or may not be in my article. I was just curious. I was talking about past bubbles or crashes. I still, to this get to this day, when I talk to people about investing or their thoughts on it, people will say, I’m scared to invest because my brother, my dad, whoever lost all of their money in the 2008 market crash

and then I think about this for a second and I want to like pursue this with them more because I think that’s such a like blanket statement that everyone says there’s something that’s been repeated to them. But it’s like, well, how did you lose your, like this, like these crashes that we have in the past does not mean that you’re losing 50 percent of your income and it’s never recovering.

Right? It’s like, did your parent in this scenario? When the market crashed at the very bottom, did they take out all their funds and sit in the sidelines and never get back in? Like the markets do recover. And I think that’s what goes back to our point of people just don’t have maybe a great education on how markets work or things.

When we’re talking about downturns and swings or even crashes, it’s not like, Oh, you’re losing your money indefinitely. It’s just things, the value of it’s going down for a certain period of time. But I would hope that if people were investing properly, they shouldn’t have lost any money in 2008.

Matt Mulcock: 2008. Well, you’re saying to now,

like if they stayed invested, no, it would have, it would have impacted

Jake Elm: So people are like, oh, this went bankrupt. Like one thing happened. Now they lost all

Ryan Isaac: So probably not the best portfolio. If that was true, then there’s a giant, probably like diversification issue for

Matt Mulcock: for sure. Or, and I mean, allocation issue, diversification issue. but also a behavior issue. Because if you’re saying you lost all your money in the market in 08 or 09, that means you sold

Jake Elm: Yeah. And then never

Matt Mulcock: and never got

Ryan Isaac: and never got back in.

And let’s pause here for

Jake Elm: So his behavior was emotional, right? So they got kind of emotional about it. But if you were kind of putting that aside and had a process, 2008 is just one thing in this long line of crashes that are going to happen.

You’re going to have to sit through three or four and you’re investing lifetime, probably.

Matt Mulcock: And, and let’s pause here for a second because we also need to, we need to acknowledge like, It was scary like 0809

Ryan Isaac: it’s not taking away from how bad it

Jake Elm: bad

it

Matt Mulcock: That’s what I’m saying. But I think I do think sometimes I know I am guilty of this of playing like the Monday morning quarterback where it’s like, we’re looking back on these historical events and we’re like, what an opportunity.

This was like, you should have stayed and look at it now.

Ryan Isaac: March of 2020 was a great

time to buy. You’re like, I couldn’t get toilet paper. Okay, I wasn’t

Matt Mulcock: will never understand why toilet paper

Ryan Isaac: were just talking

Jake Elm: Wasn’t that

Matt Mulcock: so wild of all the things.

Jake Elm: We’re

Ryan Isaac: Not water. Yeah, not water Toilet paper. I know. I don’t know.

Matt Mulcock: Uh,

But I, I guess I’m just trying to acknowledge, cause I do that again, I do this sometimes where we’re talking about this in very sterile, a very

Ryan Isaac: man. Yeah.

Matt Mulcock: But if you look back, I can only imagine, you know, oh, eight, oh nine, I was in college. like if you’re getting ready to retire or you’re, you know, even like even mid career and you are in that moment, like I remember CO obviously COVID was only four years ago. There’s a scariest time of my career, not only with investing, but dealing with clients and not knowing what’s going to happen to our company.

It was scary. So I, I, I guess I’m just saying I have empathy for people that actually lived through that,

even though we can look back now and be like, you should have

Jake Elm: but this goes to my point.

I think there’s a lot of scary things that happen with like, House prices tanking and people losing jobs and a lot of economic scary things happening. And we’re often referring to just what did the stock

Ryan Isaac: market. Yeah, yeah, the real,

Jake Elm: Real

impact is huge. Same with COVID to COVID impact is huge. The market rebounded rather quickly, which I think that’s a good point though, to make here, which is just because the world seems like it’s falling apart.

The stock market itself is always kind of forward looking. It is always just banking

on the global economy.

Ryan Isaac: stock market is a cold calculating it doesn’t care about humans because it’s just like are we gonna make money in the Future.

Yes. Okay, we’re gonna go

Matt Mulcock: up

Jake Elm: Are people still going to wake up tomorrow no matter what’s happening and go to work and

try and create a better

Ryan Isaac: and need gas and That’s like that’s what you’re betting on essentially when you have a diversified portfolio.

Jake Elm: And so

I love your point where Looking back, I think Morgan Housel probably said this, I’m probably ripping him off in a less elegant

Matt Mulcock: We rip

Jake Elm: Yeah, but he said that every past market, like recession, looks like an opportunity. But every future one looks like a risk. Which is the hard thing where, again, we just don’t know how we’re going to react to certain things.

When this next crash comes, it’s going to be something completely unprecedented or something we haven’t heard before. People are going to be

Ryan Isaac: The reason will be

Jake Elm: The reason will be completely just, we don’t know

Ryan Isaac: But the result and it’ll be the same

Jake Elm: Yeah,

Matt Mulcock: And the fact that it, again, it’s exacerbated by emotion.

We all know it will be because we have the herd mentality. People start freaking out either, either on the good end of the bad end, meaning again, going back to COVID it’s not that long ago that people were going on Twitter now X

literally telling people.

you

are an idiot. If you are still investing in the stock market and not getting into these Pointless, worthless coins.

I remember for a while we would talk internally because we were getting so much pressure of not being, how many posts were like, if your advisor’s not talking about this, they’re a bad advisor. You should fire them. I remember sitting in advisory meetings with all of us and being like, guys, Like, I was feeling the

Ryan Isaac: Well, yeah. People would be like, why aren’t you telling me to allocate into this stuff? Everybody’s doing it. Why are we not

Matt Mulcock: And then

how

Ryan Isaac: there was a hard answer

Matt Mulcock: It was tough!

Ryan Isaac: Oh, yeah.

Matt Mulcock: To, to like, sit there and do the, you know, the old Napoleon quote, like, do nothing while everyone’s losing their mind. It’s like, it’s really, really hard in those moments to be like, maybe we should?

Jake Elm: Yeah. The flip side, we’ve talked about crashes a lot, but the crazes and these wild

Matt Mulcock: the, to create the crashes.

Ryan Isaac: Did do nothing during

Jake Elm: to be more difficult than yeah. Like where it’s like, yeah, I’m fine. If you’re like, I know our portfolio is down, the economy is doing bad, but sometimes when people have a harder time with is I hear about X stock or something that’s doing awesome.

And maybe missing out on that feels harder than doing nothing during a crash.

Ryan Isaac: I think that’s totally true.

Matt Mulcock: Yeah, it’s, dude, I, I, yeah, it’s hard. I’m just saying, I guess, to that point, it’s hard for us too. Like in those moments of craziness, it’s hard.

Ryan Isaac: Well, yeah. You as a firm, as an advisor, you also feel like, what am I missing? Like I, I have

Matt Mulcock: or what if I’m wrong? What if this, what if this time is

Jake Elm: We want to give good advice and make sure we’re being

Ryan Isaac: judge. Well, we

have every incentive in the world to make our clients rich. Yes. you know, I mean, yeah.

We have ask the same questions like what if

Matt Mulcock: Yep.

Jake Elm: Yeah. So that, I mean, the main point of my article, we don’t need to get into a ton of stuff, but as

Matt Mulcock: Well, there’s so much good stuff

Jake Elm: I talked to a lot of people are kind of like, I’m kind of disappointed in my investment returns or maybe I’m not seeing, you know, other returns that people are getting.

And I think that’s like for one of two reasons, I think it comes down to one reason is you probably haven’t been invested for long enough. When we talk about time horizon, the stock market, To really meaningfully build wealth over time, you need to be in it for decades. Like I didn’t want to repeat that.

I feel like I’m like decades, like eight years is not even a long time for the stock market. 15 years may not even be a long

time, but we

Ryan Isaac: it’s like three years or two. Like, I don’t know. My returns are lagging. It’s like, I know how counterintuitive

Matt Mulcock: the magic truly happens. After two

Jake Elm: Which is hard to stay in your seat for that long. But we are, when we say longterm, we mean long term here. We are trying to build wealth over a career, over a

Ryan Isaac: There’s almost nothing that can’t see some improvement after like two or three years, your health, your career, a relationship, like a hobby you’re working on.

It is so counterintuitive to be like, you got to give it 20

Jake Elm: know!

Ryan Isaac: it’s kind of suck. And then you have to trust the data and trust that if the world’s around still, that it is going to be a similar experience. And that kind of a return from a percentage perspective, especially if you have a healthy savings rate and you’re, um, The balance itself is growing and is big.

It’s a, it’s a gigantic return that compounds on itself in the back end. You do have to place a lot of trust on the data and the science of it though.

Matt Mulcock: That’s the key is like the trust, the trust of, Like, people can understand it, I think, in, well, this is actually not, people don’t understand compounding, first of all. That’s the hard part. Our brains do not, our brains work linearly.

They do not, we do not fully grasp compounding. It’s really difficult to, to, to grasp that. , but you just said trust, like again, we’re coming back to this idea of telling, like giving into the crazes. Even as an advisor, trying to tell clients like we’re sticking to the plan. You’re seeing your friends make double digit returns, multiple double digit returns, and some crazy pointless, worthless coin.

And you’re coming to me saying, well, why are we only doing

Ryan Isaac: why do I only get 17?

Matt Mulcock: Yeah.

Ryan Isaac: It’s like, Oh, do you know how much that is?

Jake Elm: but that’s the value there, right? That’s the emotions we’re speaking of is you could be doing something for 8 to 10 years. You’re like, it’s been an okay decade, but I feel like it’s not quite what I want. And maybe our position where we feel like we can add values.

We say, just give it some more time. Just last

Matt Mulcock: And that’s really hard. It’s kind of like the equivalent of just trust

Jake Elm: Yeah. It’s like, just give it a little more time here. But that can be the thing where even if you’re really savvy and smart with all this, you can just get worn down and be like, Hey, I’m 10 years in. Maybe this doesn’t feel like it should be.

Matt Mulcock: It’s a long time.

Jake Elm: And we would all maybe break down by that, but that’s why it’s nice to have a buddy kind of on your financial journey to be like, Hey, let’s just, let’s stick it out. Let’s like really look at the longterm view here and, and trust

Ryan Isaac: Yeah.

Matt Mulcock: one of the hardest parts about this is, Um, Investing, everything to do with investing and markets works like our brains work against us in every way. Right? So for example, it’s really the opposite. Like we, you, I could ask both of you and I could tell you like, what are you doing tomorrow? You’re both are going to know what you’re doing tomorrow. But if I asked you the same question about what’s the stock market, you know, tomorrow, you’d have no idea, but reverse that and say, what are you, Jake, what are you doing in 30 years from now?

Jake Elm: No idea.

Matt Mulcock: No idea. But you could get pretty dang close to say, Hey, Jake, what is a well diversified, a globally diversified equity portfolio going to do average, like on average over the next

30, 30 years

Jake Elm: the dispersion of returns, once you get to like 15, 20 years, it’s pretty

Matt Mulcock: it’s so tight. I can tell you pretty closely unless the entire market, the entire system,

Jake Elm: Yeah.

Matt Mulcock: I guess some people believe this, but if the entire system just completely crumbles, that’s one thing.

If assuming it doesn’t, we all could sit here pretty and pretty closely tell you what the market’s going to do in 30 years.

the old I love those books. it’s

Ryan Isaac: years. Sub 20, sub 15, sub 10 year range. They’re wildly all over the place.

Jake Elm: Yeah, so that’s one reason, like, I think one reason people say you just haven’t been doing this long enough. Like, when we say long term, we really do mean a long

time. Another one is people hear returns like, well, I heard the S& P 500 did this over the past 20 years. But I was in the S& P 500 and I didn’t see the same return.

And that goes back to this behavior gap as well. I think Carl Richards first coined that term.

Matt Mulcock: Yeah. Talk about

Jake Elm: Um, where it’s where he essentially says, Investors get less of a return than what their investment actually gets. So what that means is this. So let’s say Morningstar also has done studies on this every year.

They do it in like an investor gap, a behavior gap study. they just see where it is. It’s usually what they say, what they find is that investors on average get between one and 1. 5 to 1. 7%. Return less than what they’re actually invested. Meaning let’s say the S and P 500 got 10 percent over the course of a year.

The average S and P 500 investor got 8. 5 percent instead of 10.

Matt Mulcock: Significant difference over a

Jake Elm: Yes. Which that doesn’t feel like a lie in the short term. And as we talked about, if you can pound that 1 percent over 30 years, it becomes significant and there’s studies for like, Oh, why is that? That doesn’t really make sense. And the reason is just it’s behavioral.

It’s all I’m getting out. I’m getting in, I’m putting money in a certain time and taking money out at a certain time. And it’s just the whole fear, greed

Ryan Isaac: I’m stopping my savings, I’m starting

Jake Elm: Yes, it is all behavioral and it’s not it’s it is all behavioral.

Ryan Isaac: why the best performing accounts, according to that, was it Fidelity Study, or um, deceased people’s

Matt Mulcock: Yeah, or people that,

people that forgot they had an old account.

And

Ryan Isaac: And they just left

Matt Mulcock: they oh, I haven’t had, I haven’t, I didn’t know I had this. And it’s like,

Ryan Isaac: Those are the best investors in the country.

Matt Mulcock: The ones that forget about their

Ryan Isaac: People that don’t realize or they’re

Matt Mulcock: Yeah. Or they’re dead.

Ryan Isaac: Yeah. And like those are the best

Matt Mulcock: nine dead. People are beating 90 percent of professional money

Ryan Isaac: of the PhDs on wall street that work

Jake Elm: Yeah, I can’t remember, there’s a, there’s a quote, I can’t remember who exactly said it, but it’s like, Money is like a bar of soap, the more you handle it, usually the less you have.

Whoa. Type of thing, if you want to think about it that

Ryan Isaac: I dropped the soap a

Jake Elm: lot.

There you go, yeah, yeah. It’s slippery, you know, you play with it, it’s slippery. Never done

Ryan Isaac: Yeah,

Matt Mulcock: that. That just based on this behavior gap, right. And all the data that supports this to say exactly what you just said, Jake, like you look at an investment or like, let’s say a mutual fund, what their returns are over the period of time. And then the average investor, it’s like unequivocal, all the studies back this up.

The investor return is way less than the actual investment return. And you just highlighted the behavior gap. Here’s the challenge that we face. And I’m, I’m now I’m sitting here realizing, like, I’ve turned this into my therapy session of like talking about how hard

Ryan Isaac: is to be an advisor. Let’s

Matt Mulcock: man, childhood trauma.

No, but here’s one of the challenges that we face and we want to just like expose this is we all know the true value, the ultimate value of an advisor, or let’s just say having an accountability partner, but that’s really what we are. The, the true value is to close this gap, right? Over

Jake Elm: time,

If you want to quantify, we say we have a hard time quantifying it, this would be one of the factors you could look

Matt Mulcock: huge factor. And we’re talking over the course of decades. If you were to have that person, then they did a good job. We’re talking like. Significant

Ryan Isaac: sums

of

Jake Elm: 7.

Matt Mulcock: done like three.

Jake Elm: this is just the invest. Yeah. And they do this every year and it’s usually always the same. It’s pretty consistent.

Matt Mulcock: so here’s the challenge. You’ve also seen a lot of these surveys that have come out, right. Of like investor surveys and their, how they perceive the value of an advisor and then advisor surveys of the value they add to an investor, right. Or to a client.

And we’ve laughed about this on the most recent, when we saw that client survey shows. Dead last category of the perception of value they get out of an advisor is the behavior. If you talk to, if you look at the data and you talk to advisors and you say, Hey advisor, what’s the biggest value you add to a client it’s behavior. That gap right there is what makes

it

Ryan Isaac: a value perception. Yeah.

Matt Mulcock: value perception.

Ryan Isaac: Yeah. That’s

Jake Elm: tough.

It just goes back to what we talked about. I mean, everyone thinks like, I could do this. I’m fine. I don’t need, I don’t need behavior coaching.

And so

Ryan Isaac: When the sales pitch is you’re, you will inevitably screw something up. So you need me to help you not do

Matt Mulcock: Yeah. Try that on for

Ryan Isaac: Like none of us,

Jake Elm: no, thank you. I’ll talk to you later. Yeah. No, thank you.

Matt Mulcock: thanks my man. But,

Ryan Isaac: of us believe

Matt Mulcock: and actually I just thought of this too, as I were saying this, we’re going through this gap, this value perception gap and emotions, the, I, I’m going to guess that that gap is at its peak

wideness in the most emotional times.

Ryan Isaac: Yeah.

Matt Mulcock: Meet meeting the, especially on the craze side, as we’re highlighting, The, the, that client is viewing us and our value the lowest when we’re telling them to stay in their seat and saying, no, don’t go chase those things. And they’re like, what do you even do for me?

Like you’re getting me 12 percent a year. And this thing’s

Jake Elm: over

Do you not know about my neighbor who just

bought

Ryan Isaac: a conversation, exact, exact conversation like this right now with somebody.

Matt Mulcock: Like, what are you doing for me?

Ryan Isaac: Yeah. When they’re, yeah, they, they have ideas that they’ve been pitched and they are comparing their High double digit returns to higher double digit returns. Uh, the, yeah, the exact conversation.

And I mean, whatever it is. Yeah. But it’s the

Matt Mulcock: That’s Ryan’s response.

Jake Elm: point to that is the nature of compounding here of what we always preach is we’re not trying to reach for the highest return in any given year, right? We’re never going to compete in that arena, right?

Matt Mulcock: You will lose every time you try to play

Jake Elm: Yeah, it’s just impossible to

Ryan Isaac: Well, and if you are, okay, I’m so glad you just said that. Sorry to cut him. It’s just remind him in this situation. Then this conversation I’m in right now with somebody, if you are really actually chasing the highest possible return out there, get out of stocks, get out of real estate and go do like private equity investing

into like high risk, tiny companies.

If you’re trying to chase the highest possible investment return, then get out of stocks and real estate and go chase like startups.

That’s what I’m saying. Go do venture capital. You’ll lose 99 out of 100, but the 1 is going to be an astronomical return, so that’s the Venture

Matt Mulcock: better have a lot of

Ryan Isaac: a lot of money.

Yeah, and, yeah. And

Jake Elm: But that’s hard to, yeah, it’s hard to do that. Like, maybe you can get lucky for a couple years, right? Like, let’s say you get, like, I got 30 percent this year, 35 percent the next year, whatever.

To sustain that for 30 years or 40 years,

You hate to say impossible, but like, that’s where I’m like, it’s pretty much

Ryan Isaac: Well, when you start, yeah, when you start setting your goal, like my goal is to sustainably double the average return of the public world’s public stock market or more.

It’s like, okay, well rethink that

a

Jake Elm: And so what we would like to do is just say, Hey, what can we do that you can stick with for the longest? Right. Cause that’s how

competent just works in your money. So it’s like, can we get, here’s the funny things. Like we say like, can we get average returns? Okay. But if you can just sustain those average returns for a really long time, your end result is going to be way

Matt Mulcock: bigger than

time time is the key

Jake Elm: Yes. You’re going to be way above, like you’re going to end

Ryan Isaac: The dollar amount’s bigger than you think

Jake Elm: way wealthier than your friends because of the time. Cause like, if we like to think about strategies here, like most good strategies, you want to focus like, where aren’t people like, what are people not doing? Can, can I find that people are not buying and holding stocks for 30 years?

They’re just not,

it’s hard

Ryan Isaac: you could say the same thing about, uh, any exercise routine.

It’s like, what’s the most optimal. It’s the one you’re still doing in 30 years when everyone else has quit and they’ve gone through the 10 different fads and diets and start and stop the person who’s still active. I don’t, the person is still just walking 10, 000 steps a day is better than any fad that someone’s going to start and stop in

dramatic fashion

this year and be done by the end,

Matt Mulcock: Yeah, it’s

Ryan Isaac: Like sustainability.

What’s gonna

Matt Mulcock: we talk about this all the time. It’s survival. Survival is survival is

Ryan Isaac: success.

What a

Jake Elm: Sexy word. Survive. That’s what everyone wants to hear is. Yeah. I just want to survive with

Matt Mulcock: Yeah, but it kind

Ryan Isaac: what’s your strategy, Matt? Survival.

Matt Mulcock: I think sustainability is a better word, but like, I love this to this point.

It was like, I mean, we just talked about this, like questions to ask yourself around investing. And I think one of the best questions is, can I repeat this? Can I do this again over and over and over again? You’re talking about like working out exercise. What can I do that I can be doing again tomorrow, the next day,

Ryan Isaac: Five

Matt Mulcock: next month, five years,

Ryan Isaac: Cause if you

are, that’s where the results will be. Yeah. A hundred percent.

Matt Mulcock: Uh, Jake, you have a quote in here from our guy, Jason Zweig. He’s so good. Is it Zweig by the

Jake Elm: I think it’s Zweig. Yeah, I

think you got that right,

Matt Mulcock: Zweig. Uh, he says investors are neither rational or irrational. They’re human.

Ryan Isaac: Yeah.

Jake Elm: that’s a good,

Matt Mulcock: I love that. It’s

Ryan Isaac: like, we’re

Matt Mulcock: we’re,

we’re all, and we’re all in the same boat. Us, you know, our clients, everyone out there, like it is a very human thing to get wrapped up in your emotions.

Jake Elm: ,

Yeah, I don’t think we’re saying like, don’t have any emotions or you’re never going to work out. You’re never going to get scared. We have is all of us. But I think, again, I think Morgan Helson maybe said this, but rather than like working towards like cold, hard rationality, none of us are going to achieve that.

Can we be reasonable? You know, can we do something that’s reasonable that we can stick with and that sustainable I think is a good approach.

Matt Mulcock: I love what you just said earlier too. You, you made a comment, like kind of a side comment. You said, if you can do this, the boring focus on your behaviors, do it for a long time, you’re going to end up way wealthier than your friends. And it’s so true. Like that’s the irony here. If you can just maintain those average returns

while

Jake Elm: tortoise and the hare, the whole

Matt Mulcock: yeah, just jumping around and doing their thing from year to year, investment to investment, giving into every craze, selling out when they’re scared.

If you can hold the line for, like you said, your whole life, your whole investing career, which is your life, you will end up being

far wealthier than anyone that’s out there chasing these stupid

Ryan Isaac: it just becomes about like, okay, I can’t force myself to not be emotional. That’s insane.

Then it just becomes about what is the system and the environment that I can control that I’m a part of, who are the people around me? Oh, what, what’s the process I go through when I want to make a big decision when I want to make a change? Who do I talk to? How do I go through that process? How do I think about it?

You know, where do I get my information from? You can, you can set up your environments. You have control over the processes you go through when you make a big decision. So you can’t not be emotional, but you can control the environment you’re in and the process you go through to make decisions. And that’ll change things.

Matt Mulcock: You must have been doing this for a long time because when I say this, I mean podcasting

because this is exactly we wanted to wrap up on

Ryan Isaac: wrap up. Oh, were you just gonna say that? , what? You were gonna say the same

Matt Mulcock: thing. No, I’m yeah, I’m saying that I wanted to wrap

Ryan Isaac: up

We always do that.

Matt Mulcock: we somehow always do this, but I wanted to wrap up with like, yeah, key takeaways. Like what can so someone’s out there listening and saying like, cool guys, you’re telling me that I suck and I’m my own worst enemy, which we all are. Especially when it comes to money.

So what do I do? Like, what do I do now? Kind of like the, so what, and you just highlighted, I think a lot of the, so what’s, I think it’s like, number one, you got to be aware, you’ve got to be aware and you’ve got to be willing to acknowledge the truth that is, you said it, none of us are purely rational humans.

Not one of us, there’s not a person on this planet that is, can I find a reasonable solution, but it, can I acknowledge and be aware of the fact that, like, I am going to be my own worst enemy. I got to find ways to shield myself from these emotional decisions.

Jake Elm: But that’s step one, even just acknowledging that probably changes your behavior a little bit, right?

Just knowing like, Oh, there’s a market crash. And I am just like acknowledging my feelings of, I am feeling a little scared. I’m feeling a little nervous. Let’s rather than act on that. Can we just think

Ryan Isaac: that Yeah, that’s what a therapist would tell you. Just let those emotions move through your body without taking

action. Be curious about them and, and observe

Jake Elm: that’s my second career moving into that

Matt Mulcock: And the more you resist them, the bigger they

Ryan Isaac: The worse they

Matt Mulcock: Yeah. Um, but yeah, I do think you’re, that’s right. I think acknowledging them, I would say if you’re a younger person, cause I think I, I would think I know my own life,

the

acknowledgement and like awareness increases with experience and mistakes. So if you’re a younger person, I’m kind of like, go experience

it

now. go, go take your lumps early.

Right. Like make some mistakes, lose some money now when the stakes are low. And it will save you a ton of money because there’s a lot of young people out there right now guaranteed that are listening and being like, these guys are like, yeah, yeah, yeah, cool, but not me. I know what you’re saying in theory, but not me.

So to those people, and if you’re thinking that, first of all, I’d say, yeah, I totally get that. Go and make some mistakes, go try out that investment, the private thing, whatever, make some mistakes, lose some money, realize that that’s how you’re going to increase your awareness. Thanks. I think it’s okay.

Like, I think we’ve all done, I know I’ve made some money mistakes and I’m like, dang, I’m not going to do that

Jake Elm: that again. Education is a big piece

of it again. Like just, yeah. Education is a big piece is educate yourself on how the stock market works and, and things there. Again, if there is a crash, that does not mean you’re losing your money.

And definitely it usually will recover. It’ll go back up. Same thing with these crazes. Nothing in the stock market lasts forever is I think a good principle to always have in mind. And so to say, even educating yourself about that would probably help to some behavior. Well, yeah, this market crashes in the end of the world.

I’ll be okay.

Matt Mulcock: I would say, as well, we talk about like accountability partner, having someone in your corner, I think that’s required. It doesn’t have to be an advisor, but I truly do think if you’re going to survive this game, you’re going to sustain yourself to build wealth. It’s really hard to do it alone.

Ryan Isaac: What is the reason why the wealthiest people and families and institutions have teams and advisors and people don’t Successful people don’t do things alone, they just

Matt Mulcock: I think one thing to look at is. When you are building out that team, you’re finding an advisor, you’re finding an accountability partner, whatever, whoever it is, I think, make sure that you’re playing the same game as that person. So the great Neval says, I like to play long term games with long term people.

Like find someone, if you know, you’re playing the long term game, you got to find someone who’s also do that meaning. There’s advisors out there that are hucksters that are just trying to throw crap at you, and it’s pretty easy to tell, like, this person is not playing a long-term game.

Um, I think it’s really, really important to match that up, play the same game as whoever’s gonna be

Ryan Isaac: on

your team. Totally. Oh yeah.

Matt Mulcock: Um, what other takeaways? Anything

Ryan Isaac: else?

No, uh, piggybacking on what you just said was, uh, just what people’s incentives are. You can see what their game is and what their time horizon is with their incentives, so. Yeah, I think it’s great

Matt Mulcock: Incentives are like when it comes to money, honestly, incentives are the most powerful thing in the

Ryan Isaac: are we in the sadness group or in the no emotion group today?

Matt Mulcock: I feel good. Like I podcast with you

Ryan Isaac: I,

don’t feel, I don’t feel no emotion.

I

feel great. Emo positive

Matt Mulcock: I feel close to you guys. I feel warm and fuzzies.I’m in like the woman fuzzy group. Uh, Jake, any other thoughts on this? Any other final words of wisdom?

Jake Elm: No, actually.

Ryan Isaac: Okay. Wanna make a bet?

Matt Mulcock: Uh, you know, what’s funny. I’m going to call out Jake cause he just said no. And I love this. There’s been multiple times that I’ve asked Jake a question on a podcast. Like, just like, what’s your thoughts on this? And Jake will say, no, he’ll always say he’ll go. And he’ll always go, I know that’s not good podcasting.

Jake Elm: I respect it

Ryan Isaac: it’s the right

Matt Mulcock: I respect it though. I

Jake Elm: No, it’s actually great podcasting because you’re being able

Matt Mulcock: it’s actually great podcasting. Cause you’re being as the kids love to say authentic, right? Authentic. So, , you want to, you want to take us out?

Ryan Isaac: out? We love hearing from you at Dennis Advisors. And more than that, we love being your buddy on your journey, emotional or not. So if you’d like to talk with an advisor, our calendars are wide open.

People are manning the phones. They’re standing by right now.

Matt Mulcock: There’s only a few left.

Ryan Isaac: only a few left. You gotta grab them.

Matt Mulcock: although our calendars are wide open. There’s

Ryan Isaac: There’s only a few left and it’s and that’s so true that the button on our website went from green as in like wide open to

Matt Mulcock: It’s caution. Only a few

Ryan Isaac: there it’s limited

Matt Mulcock: And you don’t want to know what happens when it goes to

Ryan Isaac: You we we haven’t even seen when it goes to red, but we are scared So go to Dennis advisors comm right now While there’s still space left and sign up for a free chat with a friendly dental specific advisor today We’d love to talk to you.

Jake Elm: Wewould. We would love to talk toyou.

Ryan Isaac: Thank you everybody

 

Keywords: money, emotions, finance, decisions, stock market crash, emotional investing, investments

Behavioral Finance, Investing, Market